Best’s News & Research Service - April 12, 2016 02:07 PM (EDT)
A.M. Best Revises ICR Outlook to Positive for Virginia Farm Bureau Mutual Insurance Company and Its Subsidiaries
- April 12, 2016 02:07 PM (EDT)
Oldwick //BestWire// - A.M. Best has revised the issuer credit rating (ICR) outlook to positive from stable and affirmed the financial strength rating (FSR) of B++ (Good) and the ICR of “bbb” for the members of the Virginia Farm Bureau Group: Virginia Farm Bureau Mutual Insurance Company and its wholly owned subsidiaries, Virginia Farm Bureau Fire and Casualty Insurance Company, Virginia Farm Bureau Town and Country Insurance, and Countryway Insurance Company (Syracuse, NY). The outlook for the FSR remains stable. All companies are domiciled in Richmond, VA except where specified.
The revised outlook reflects Virginia Farm Bureau’s improved underwriting results and surplus appreciation over the past three years. As a result, operating performance has been favorable, underwriting leverage ratios have improved and overall risk-adjusted capitalization has strengthened. These results are due to significant risk management and exposure management initiatives that have materialized favorably. The addition of Countryway Insurance Company also provides geographic diversification, and has become increasingly profitable in recent years. The positive outlook reflects A.M. Best’s opinion that favorable operating results and improvements in risk-adjusted capitalization will continue.
Offsetting rating factors include Virginia Farm Bureau’s volatile results over the previous five years. While risk-adjusted capitalization has improved, the group’s underwriting leverage ratios remain elevated compared to the industry composite. Additionally, the group’s return on equity and revenue both trail the composite due to large underwriting losses in earlier years, and the expense ratio continues to be a lag on results. As a large portion of the group’s business is conducted in Virginia, they also remain exposed to potential concentration risk on regulatory issues and catastrophic events.
This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.